Interior’s Office Of Insular Affairs Conducts Workshop On Utility Survival In The Pacific Freely Associated States

Washington, DC (May 6, 2010) – On April 27-30, the Department of the Interior's Office of Insular Affairs (OIA), in coordination with the East-West Center, held a high-level planning workshop in Honolulu for utility managers, financial officers and top elected officials from the Marshall Islands, the Federated States of Micronesia, and Palau to address one of the most serious economic issues facing each: the worsening financial condition of island power and water utilities. The workshop brought together thirty-five managers and financial officers from the utilities and leaders from the executive and legislative branches from the Marshalls, Palau, Kosrae, Pohnpei, Chuuk and Yap throughout the Freely Associated States.

"This was a real hands-on workshop where financial and utility experts shared strategies to assist the islands in dealing with water and power challenges," said OIA Director Nikolao Pula who participated in the workshop. "This combined participation of experts and decision-makers was a success. This workshop follows through on a Joint Economic Management Committee (JEMCO) and Joint Economic Management and Financial Accountability Committee (JEMFAC) 2009 resolution which recommended collaborative efforts to address critical issues facing the utilities in the Freely Associated States."

The current economic recession has severely impacted the islands' ability to provide reliable electricity and clean drinking water. The rising cost of fuel, equipment, and essential supplies is threatening the long-term financial viability of several of the island utilities. The ability of these utilities to generate sufficient revenues is severely restricted by their small, generally poor island populations and all are facing large and growing operational deficits.

Several experts in the field of utility finance and management were on hand to work with each island delegation to begin addressing this problem. Among the topics addressed were improving operational efficiency, coping with fuel prices, increasing revenue generation, cost recovery, and the increased use of renewable energy sources. With the help of these experts, island leaders started the process of crafting specific strategies to address the problem in their own island states.

Also participating in the workshop were representatives from the U.S. Department of Energy's National Renewable Energy Laboratory, USDA Rural Utilities Service, the Asian Development Bank, the Pacific Power Association, and the Japan International Cooperation Agency.